621 #
© 2014 Pearson Canada Inc.#
Under the current managed float exchange rate regime, countries with ____ in their
balance of payments frequently do not want to see their currencies ____ because it makes
their goods more expensive abroad and foreign goods cheaper in their countries.
A) surpluses; depreciate
B) deficits; depreciate
C) surpluses; appreciate
D) deficits; appreciate
Answer: C
Diff: 2 Type: MC Page Ref: 504
Skill: Recall
Objective List: 20.3 Summarize the arguments for and against capital controls
Under the current managed float exchange rate regime; countries with surpluses in their
balance of payments frequently do not want to see their currencies appreciate because it makes
their goods ____ expensive abroad and foreign goods ____ in their countries.
A) more; cheaper
B) more; costlier
C) less; cheaper
D) less; costlier
Answer: A
Diff: 2 Type: MC Page Ref: 504
Skill: Recall
Objective List: 20.3 Summarize the arguments for and against capital controls
Under the current managed float exchange rate regime, countries with balance of payments
____ frequently do not want to see their currencies ____ because it makes foreign
goods more expensive for domestic consumers and can stimulate inflation.
A) surpluses; depreciate
B) deficits; depreciate
C) surpluses; appreciate
D) deficits; appreciate
Answer: B
Diff: 2 Type: MC Page Ref: 504
Skill: Recall
Objective List: 20.3 Summarize the arguments for and against capital controls
Which of the following is true?
A) Special drawing rights are loans to countries made by the IMF.
B) Changes in the quantity of special drawing rights are tied to changes in the quantity of gold.
C) Special drawing rights are a paper substitute for gold.
D) Special drawing rights are not held as international reserves.
Answer: C
Diff: 2 Type: MC Page Ref: 504
Skill: Recall
Objective List: 20.3 Summarize the arguments for and against capital controls